‘Malaysia ready to restrict EU trade’

  • Nation
  • Thursday, 08 Mar 2018

At the dewan rakyat

MALAYSIA will impose trade restrictions on the European Union should it proceed with a plan to limit the use of palm oil in biodiesel, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

“For now, we are using diplomatic channels to resolve this issue, but if the final decision by the EU is not in our favour, we are ready to take responsive action, including limiting the purchase of certain items from the EU.

“I must however highlight that there are no suggestions so far to cut diplomatic ties with the EU,” he said in response to a question by Datuk Seri Dr Irmohizam Ibrahim (BN-Kuala Selangor) in Parliament yesterday.

Dr Irmohizam had asked about strategic measures to address the import ban on palm oil to the EU market, and the contingency plan if a comprehensive solution cannot be achieved.

In mid-January, the EU approved draft measures to reform its power market and reduce energy consumption to meet higher climate goals.

The draft includes banning palm oil in motor fuels from 2021, a move that will adversely affect Malaysia’s palm oil exports to the region.

As the world’s second biggest producer of palm oil, Malaysia’s export of the oil and by-products was valued at RM77.8bil last year, of which RM11bil was for export to the EU.

A significant percentage of the palm oil exported to the EU is used to make biofuel, leaving Malaysia’s producers fearing overall demand will fall.

On a question by M. Kulasegaran (DAP-Ipoh Barat) as to whether the palm oil situation was a result of Malaysia’s failure to ensure environmental sustainability, Mah said this was not the case.

“The attacks on palm oil are not new. First it was allegations that palm oil was bad for health but that has since been debunked, so the attention now is on how sustainable it is for the environment.

“To me, all of this is protectionist. The massive haze situation in our neighbouring country in 2011 made many EU parliamentarians emotional and they used that as a reason to target palm oil,” he said.

Mah claimed palm oil was a “victim of its own success” and that the EU’s draft measure was a form of “crop apartheid” and commercial discrimination which contravened its pledges under the World Trade Organisation.

“Palm oil had previously amounted to 10% of the world’s vegetable oil exports but today, we have reached 60% due to our efforts.

“Some fear that if this is not ­limited now, in the next 10 years, we can reach 80%,” he said.

Mah also noted that Malaysia has regulations for environmental sustainability and that it had made a pledge that 50% of its land will be forest reserves.

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